Two pharmaceutical firms top the “100 Best Corporate Citizen” list in the most recent issue of Corporate Responsibility Magazine. Bristol-Myers Squibb and Johnson & Johnson were ranked No. 1 and No. 2 respectively, joining such other top firms as Microsoft, Disney, and Coca-Cola in the top 10.
The magazine in conjunction with the Corporate Responsibility Officers Association and a Ranking and Rating Committee developed the criteria and reviews the ratings, which are actually compiled by IW Financial.
Using publicly available data and an involved assessment process that includes 298 questions, IW Financial reviews the public records of each of the Russell 1000, scoring them in seven categories: human rights, philanthropy, employee relations, environment, governance, financial performance, and climate change.
The complex formula gives more weight to the environment and employee relations than it does to philanthropy or corporate governance, but no single category contributes so heavily that it alone can skew the overall ranking. Thus Disney, which ranked 204 in environment, came in No. 10 because it did well in other categories. The lower the score or rank, the better.
With a score of 36.12, Bristol-Myers was more than seven points lower than second ranking Johnson & Johnson. However, it came with a yellow caution. Forbes, which published a lengthy critique of the 15-year-old list, explained the yellow flag was included because of a lawsuit brought against Bristol-Myers alleging the company released cancer-causing chemicals at its New Jersey plant.
Citing other problems Bristol-Meyers has wrestled with in the recent past, including charges of inflating drug prices and paying doctors kickbacks for prescribing its products, Forbes said the “decision to put the company at the top of its lists is striking.”
Johnson & Johnson was lauded by Forbes for its “bold step in February, making all its clinical trial data available to scientists around the world.” The company also participates in the United Nations’ Millennium Development Goals, which makes certain drugs available to children and others in developing nations.
Gap, Inc., which came in third, was lauded by Forbes for its education efforts among women garment workers overseas, its pledge to cut greenhouse emissions, and for its training and internship program for youths in New York and San Francisco.
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Two other companies were yellow flagged by the magazine: 62nd-ranked Occidental Petroleum Corp., and 90th-ranked Computer Sciences Corp. The former got its flag because of a lawsuit brought against it by a band of Peruvian indigenous people who claim the company dumped millions of gallons of toxic waste into the Amazon. Computer Sciences was flagged as a result of a securities suit it settled last year.
Pacific Gas & Electric, which would have ranked 75th and has appeared on previous lists, was kicked off due to “the legal fallout from the 2010 gas pipeline explosion in San Bruno, CA. Eight residents were killed and 38 homes destroyed,” the magazine explained.
The magazine’s Editor-in-Chief Bill Hatton told Forbes that the scores for the companies has been improving over the years. “Companies see the value in acting responsibly,” he said, adding it also helps them in recruiting. “People like to work for the company wearing the white hat.”
How useful is this list? Forbes expressed some doubts:
The yellow and red cards should be a signal that this list underlines the corporate responsibility initiatives put forth in the companies’ publicly available documents. It means the top-rated companies are doing the best job of appearing responsible. Not to discount the positive things those companies are doing, but CR magazine’s small staff and limited resources can’t probe beyond what’s known on the surface.